Changes That Can Affect Your Homeowners Insurance

Being a homeowner comes with many responsibilities, one of which is reviewing your homeowners insurance coverage on a regular basis. It’s a task that is often overlooked, but it’s critical in ensuring that your investment is properly protected.

What homeowners may not realize is that any changes made to a home — additions, renovations, upgrades, etc. — could result in inadequate coverage and leave you vulnerable to losses. On the other hand, some upgrades can lower your premiums — savings you could easily miss out on if you don’t consult your agent.

Here are just a few of the common changes that could affect your premiums and coverage.

Pools and Trampolines
Amenities like these can make yours the most popular house on the street, but from an insurer’s perspective, they also make it riskier. Before you break ground on a pool or install a new trampoline, talk to your agent about adding these items to your homeowners policy.

Jim Fuerstenau, LUTCF, CIC, owner of the Fuerstenau Insurance Agency, LLC, with Farm Bureau Insurance says when making additions like these, it’s also important to review the amount of liability insurance coverage on your policy.

“If you’re adding a pool it most likely means that your circumstances have changed since you initially purchased coverage,” he said. “Maybe you now have kids, or you received an inheritance, or your income has increased. Whatever the reason, it would be prudent to request a review with your agent to make sure your current liability coverage is adequate.”

A New Roof
Your roof is the first layer of protection against the elements, and as it ages, it becomes more susceptible to damage. At some point, your insurance company will likely inspect your roof, and depending on its age and condition, they may require you to replace it in order to maintain coverage.

A Wood Burning Stove
If the recent below-zero temperatures inspired you to add an extra heat source to your home — a wood burning stove, corn burner, fireplace insert — you need to check in with your insurance agent right away.

“Not only should you find out how it will affect your policy, but you also need to ensure the installation meets the insurer’s standards,” said Fuerstenau.

While disclosing additions like these could potentially increase your premiums, the cost of not disclosing them could be much greater should something go wrong.

A Home Security System
Many insurance companies offer a discount for common security measures, like a smoke detector, burglar alarm, or deadbolt locks. Some companies will provide a larger credit for installing a central station alarm, which is a system that is monitored by an alarm company 24/7 for burglar activity and fire.

Home Remodeling
Changes that affect the value of your home may also affect your homeowners policy. For example, let’s say your insurer based your original coverage on an outdated kitchen with builder-grade cabinets and laminate countertops. Two years after you move in, you spend $35,000 to upgrade the space with quartz countertops and custom cabinetry.

The question becomes, is your existing coverage enough to rebuild that upgraded kitchen in the event of a disaster? Chances are, probably not.

A Home-based Business
Standard homeowners insurance may provide some protection for home-based businesses, but coverage varies by policy and it may not always be enough. Also, keep in mind that having customers in your home presents a liability that your policy may not cover. If you’re starting a home-based business, consult your agent to find out if you should add an endorsement or purchase a commercial policy.

Changes like these can happen at any time, so the best course of action is to contact your insurer to review coverage every year. A good agent will ask the right questions to make sure your coverage continues to offer the proper protection.

“I generally see two types of homeowners,” said Fuerstenau. “The first sees insurance as compulsory and doesn’t take their obligations too seriously. The second has a real pride of ownership and talks to their agent on a regular basis, letting them know when any changes occur that might affect their policy. Those are the homeowners who have successful insurance experiences.”

If you’re looking for an experienced agent who can help you select the right coverage and understand the requirements applicable to you, visit the Greater Lansing Association of REALTORS® at www.lansing-realestate.com for a list of local insurance professionals.